The Lebanese Hotel Sector

According to recent statistics and figures, the hotel sector in Lebanon currently seems to be an attractive one, offering many opportunities for investors. It is growing very fast, and since tourism in Lebanon is also improving, the hotel sector growth grows accordingly. This article, was written in 2003.

In the past couple of years, the number of tourists visiting Lebanon increased to reach around 1,000,000 in 2003, despite international political tension. The hotel sector has been recently “booming”; many famous hotels have opened, and many others are currently being built, including the famous Four Seasons hotel. Basically, the hotel sector began its “comeback” after the Israeli withdrawal from the south of Lebanon, new investments started appearing. Statistics show that the percentage of Arab tourists visiting Lebanon increased 18 percent from 2001 to 2002, and almost doubled in 2003 and 2004. Statistics also show that European tourists made up around 26 percent of tourist in Lebanon in 2002. This shows that tourism in Lebanon is growing, and more tourists are visiting Lebanon every year, providing more and more opportunities for hotels.

When analyzing the current situation, one can find that there are many factors that make the hotel industry in Lebanon currently attractive. Lebanon is known for having various tourist attractions, from archaeological ruins, to beautiful nature, to entertainment and nightlife… To begin with, Lebanon’s geographical location is a strategic one. The country lies in the middle of the Mediterranean Sea’s East coast, making it a gateway or link between Europe and the Middle East, and a crossroad between Europe, Africa and Asia. Its location also gives the country 4 seasons of Mediterranean weather. Lebanon offers ski resorts in winter, and beach resorts and country clubs in summer. The summer climate also seems to be favored by gulf tourists, as the summer climate in their countries is very hot and probably unbearable. Because Lebanon’s close to the Arabian Gulf, and has many tourist attractions, people from Gulf countries enjoy spending their summers over, specially that Lebanon, being an Arab country, speaks the Arabic language, so the Gulf tourists find it an asset to be in a country where they can speak and understand the native language. Arabian Gulf tourists are also known to bring in lots of money to Lebanon, so this provides more profitability and opportunities.

If tourists are looking for attractions, Lebanon also has many archaeological ruins for tourists to look forward to. In addition to that, Lebanon has many unique natural spots, such as the cedars and the Jeita grotto. Other than that, Lebanon’s nightlife, many new restaurants, and overall ambiance might be attractive to other groups of tourists. Tourists can find all sorts of entertainment in Lebanon, and might even be attracted by the Baalbek and Beiteddine festivals in summer. All these factors show that the tourism sector in Lebanon offers a lot of potential, especially since it has been recently developing, so hotel investors might find lots of opportunities.

Another advantage for the hotel sector is that Lebanon has become relatively safe, so there’s no longer a fear of war or conflict with Israel.

Yet another factor that makes the hotel sector attractive is that many locations in Lebanon still don’t have enough hotels. An example is the Aley and Bhamdoun area. This area attracts hundreds of Gulf tourists in summer, and could attract even more if it had more hotels to accommodate a larger number. The current number of hotels is very few, and their ratings are not so high. There are also other attractive regions in which hotels can be developed. Some of these attractive regions include Jounieh & Kaslik, and others include mountain areas such as Broumana and  Zahle.

Yet another attractive factor is the opportunity to build more three and four star hotels. Statistics show that Beirut mostly has four and five star hotels, and lack many three and four star hotels. This provides an opportunity because not all tourists or market segments care for or can afford to stay in expensive and luxurious five star hotels. According to statistics 70 to 80% of the three star hotels are situated outside Beirut.

Despite all the factors making the hotel sector in Lebanon attractive, there are still a couple of factors that scare investors away. Lebanese and Middle Eastern political instability is a major factor that might make tourists and investors stay away. Internal political interference in investments and market share also repels investors away. Another major unattractive factor is the Lebanese economic depression. Taxes are sometimes high so investors won’t be attracted. Furthermore, everything in Lebanon is somewhat expensive, and this won’t really attract tourists. Other minor unattractive factors include the fact that Lebanon still needs to promote itself more, and needs to target a more diverse variety of international tourists. Competition can also be unattractive, but it is still not very strong. Lebanon needs to compete with Dubai, which is also flourishing, and start competing with Europe, as it was in the early ’70s.

So as we can see, there’s a lot of potential for growth, especially if the political and economic situations improve. Lebanon can become the center of tourism in the region, and this would present opportunities for above average profitability for good hotels. Above average profitability can be achieved in the areas where more hotels are still needed, and in good quality 3 star hotels in Beirut, because there aren’t many. The hotel sector will probably expand and grow in the next couple of years, and as tourism in Lebanon grows, the hotel sector will even flourish better… time is yet to tell.


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